You've been sitting together for two hours, the coffee has gone cold, and it feels like the best conversation you've had in months. You see the same market and laugh about the same clients. At the end one of you says: "Let's do this." Three weeks later you're at the notary's office, signing the founding documents.
What almost never happens in those two hours: anyone checking whether the seats fit. You know each other, so you get started. The fit only gets tested once things blow up.
A co-owner is not a hire with equity
You can correct an employee in the wrong seat. It costs money and nerves, and we've laid out exactly how much in What a Bad Hire Really Costs Your Agency. But it can be done. You move them to another seat or you part ways.
A co-owner is different. They're named in the articles of association, the founding agreement that sets out the shareholders' rights. They vote on the company's direction with you, and they don't leave just because you'd like them to. How an exit works is mainly governed by that agreement. If it says little, pushing someone out against their will usually takes good cause. And that agreement was usually written at a stage when both of you still thought it would never come up.
That's exactly why the first conversation is the cheapest moment for uncomfortable questions. Later, the same questions cost many times more, sometimes even a friendship.
How to set up the first conversation
The conversation about fit isn't an interrogation or a job interview. You're checking each other out, as equals. A few ground rules help.
Keep it separate from the business plan. If you talk about pricing and fit at the same time, the business plan always wins, because it feels like progress. Set up a separate meeting, just for the two of you.
Answer with situations, not adjectives. "I'm a team player" says nothing. "When my last project fell apart, I called the client that same evening" says a lot.
Take notes. Each of you writes down the other's answers in your own words and reads them out afterwards. Wherever a summary is off, you've found your first misunderstanding before it costs anything.
And leave equity out of it. If you bring up percentages early, you negotiate instead of checking. Percentages come later, once it's clear who fills which seat. Why this order saves so much conflict is covered in Seats First, Then Percentages: Why Equity Talks Start at the Wrong End.
The 5 vetting questions
1. Does this person fit me?
This isn't about liking each other. Liking each other is why you're talking in the first place. The question is: do you want to sit at the table with this person in the worst quarter of the next 5 years? When your biggest client leaves and the account runs dry?
How to ask it: "Tell me about your most difficult working relationship. What did the other person do, and what did you do?" Watch whether they find a share of the story that belongs to them. Someone who is only ever the victim in every story will be the victim in yours too.
2. Does your entrepreneurial DNA match?
Every founder has a seat where they're strongest. One builds systems, another optimizes, a third sells, a fourth goes looking for the new. In the CORE model these roles are called Constructor, Operator, Rainmaker and Explorer. Every entrepreneur carries all 4, but in different strengths.
How to ask it: "What kind of work makes you lose track of time, and what have you been putting off for weeks?" The second half of the answer matters more. It shows you which seat in your company stays empty if you both put off the same work.
3. Do your skills complement each other, or double up?
This question often gets skipped because doubling up feels so good. Two people who think alike understand each other instantly. They also share the same blind spots. Whatever neither of you likes doing, nobody does. What that looks like in existing founder duos is described in Co-Founder Duos in Agencies.
How to ask it: "Which task should never land on your desk in our company?" Put your answers side by side. If the same thing shows up twice, you've found your first gap.
4. Do your characters fit?
Character rarely shows when you talk about the future. It shows in how someone handles mistakes and promises. How does the other person talk about former partners and employees? Do they keep small promises, even before you've started anything together?
How to ask it: "When did you last break a promise, and how did you sort it out?" Anyone who can't come up with an answer either has a very short memory or a problem with the question. Either way, you should know.
5. Do your value systems match?
Agreeing on a goal is easy. The fights are about how to get there, because each of you measures what's right by a different yardstick. One wants security, the other wants speed. One likes a lucrative project the other would turn down. Under pressure this difference grows instead of shrinking. More on that in why co-owners break over the same decision.
How to ask it: "Which project would you turn down even if we badly needed the money?" And the other way round: "What would you accept a year without profit for?"
How to tell you're dodging the questions
Some conversations feel good precisely because they don't test anything. A few phrases are reliable warning signs.
"We'll sort that out later." Later almost always means: once it already hurts.
"It's different with us, we're friends." Friendship makes the start easy and the breakup hard. More on that in why friendship is no proof of fit. It doesn't replace the check.
"We'll talk about money once there is some." Then the first time you talk about it is when one of you urgently needs it.
"The main thing is to get going." Speed is good. Speed without settled seats means you both do everything and neither of you finishes anything.
If one of you dodges one of the 5 vetting questions, that's not a dealbreaker. It's the point where you should talk longer, not shorter.
From the conversation to the articles of association
The questions don't replace a contract, and no contract replaces them. What you find out in the conversation belongs in the preparation of the agreement: who makes which decisions, and how one of you can leave without taking the company down too.
These points belong with an advisor who specializes in corporate law and tax. This article is not legal or tax advice. What applies to you depends on your legal form and country, and that is something to settle with a lawyer and tax advisor. All it does is make sure you walk into the notary's office with settled seats rather than just a good feeling.
If you want to put the seats in writing, you'll find the template in Who Decides What? A Seat Map for Co-Founder Duos.
Taking on a co-owner is the hardest people decision a company makes, because you can hardly reverse it. That's why fit belongs before you sign the articles of association: does the person fit, does the entrepreneurial DNA match, do the skills complement each other, do the characters fit and do the value systems match.
FAQ
What should I check before becoming a co-owner? Fit, before you get to equity. In the first conversation, clarify whether you suit each other, which seat each of you naturally fills, whether your skills complement each other, how the other person handles mistakes and promises, and whether you make decisions by the same yardstick.
Can I test a co-founder first? A joint project before you start the company shows more than any conversation, because you make real decisions together. But run it through an existing company, or settle beforehand who the contracting party is. If you appear jointly, say with a joint proposal or a joint invoice, you may already have formed a partnership (in Germany a GbR, a civil-law partnership), and you are both personally liable for its debts. It also matters that each of you knows your own seat beforehand. Otherwise all you're testing is whether you like each other.
When should we talk about equity? Once it's clear who contributes what over the long term. If you start with the percentages, you negotiate before you know what you're negotiating about. For the contract questions, bring in a specialist advisor.
Know your own seat before you check out a partner. The free QuickCheck launches soon, and if you're on the waitlist you're in from day one. It shows you your Best Seat and your CORE profile. Each of you takes it separately, and afterwards you talk about results instead of gut feeling.
About the Author
Founder
Joram Hoefs is the founder of CORE-Navigator. With over a decade of experience in business consulting and personality diagnostics, he has made it his mission to develop data-driven tools that help entrepreneurs understand and leverage their unique DNA.
More posts by Joram Hoefs